CFOs: Leading the way to sustainable enterprises
Today’s unpredictable and constantly changing world is making it increasingly challenging for organizations to chart a path forward. To thrive today, tomorrow and in the future, organizations must find ways to achieve sustainable, long-term success. And CFOs, because of their skills and knowledge, will play key roles in making this happen.
The global economy is in flux
Around the world, organizations are faced with an unprecedented array of societal, technological, economic, environmental and geopolitical dynamics—all of which are driving changes that impact an organization’s ability to remain viable and competitive (i.e. stay in business) or flourish (i.e. innovate and grow). Challenges include:
- Aging populations are putting pressure on government budgets in developed countries while surging youth populations create challenges in the developing world.
- New technologies are disrupting industries, driving businesses to innovate.
- Trade deals are at risk, and tariffs are rising.
- Old geopolitical certainties are being upended.
- And looming over it all: climate change.
With so many drivers of change in play, an organization’s ability to achieve sustained success is coming under greater scrutiny. Sustainability issues are becoming material financial considerations for businesses in a range of industries. A 2017 CPA Canada survey of business leaders addressed the issue of sustainability and defined it as embedding the management of environmental and social issues into strategy and business processes. Forty-six percent of respondents said they were already incorporating sustainability into their overall business strategy.
It’s a prudent move. Investors, lenders and insurers are paying much more attention to sustainability-related risks and demanding greater transparency around them, which means companies are under more pressure to show they’re sustainable. This only reinforces that today’s CFO role entails a broad range of functions, including identifying strategies that help an organization successfully navigate change, display transparency and protect its reputation.
Being a sustainable organization
What does it mean to be sustainable? For one thing, CPA Canada believes it means taking a long-term view and not allowing short-term financial outcomes to distract from the bigger picture. It also means understanding the disruptive forces mostly likely to affect the organization and making sure it has the capacity to respond to disruptors.
Sustainable enterprises are self-reinventing and take deliberate action to thrive in a changing world. They don’t wait to be disrupted—they disrupt themselves, evolving as needed to turn today’s challenges into tomorrow’s opportunities.
How CFOs can help
Most importantly, CFOs can champion a new way of thinking among leadership—one that not only anticipates future challenges but responds to them with vigour and boldness.
CFOs can lead efforts to build the business case for sustainability-related initiatives and evaluate the costs and benefits of the organization’s options for responding to the many drivers of change.
“Change is a constant continuum, and the pace of change is rapidly accelerating. The resilient, adaptive and innovative will survive.” - Davinder Valeri, Director, Strategy Risk and Performance Management at CPA Canada.
And CFOs will help make sure they do.
About Canada’s CFO of the Year Award
Presented by Financial Executives International (FEI) Canada, PwC Canada, and Robert Half, Canada’s CFO of the Year™ Award is given annually to recognize and honour the best in financial leadership.
